The African dilemma

Africa is becoming an attractive destination for business which is leading to agencies establishing new offices to serve their needs

The African dilemma

Africa is rising. Strong growth rates, youthful populations and improving risk profiles are putting the continent on the investment map. Nigeria is even a constituent of MINT, the latest acronym representing countries expected to out-perform (Mexico, Indonesia, Nigeria and Turkey).

In-house communications teams, large public relations groups and specialist communications boutiques alike are rushing to ensure they have the African manpower and offices to benefit. What could possibly go wrong?

The answer, of course, is ‘everything’. We have been here before. Wars, famine, poverty and the sheer size and scale of the African continent have made forecasts foolish in the past, while western companies from GlaxoSmithKline to Unilever have proved that Africa remains a risky place to operate.

‘Africa is the land of opportunity right now but that also brings with it challenges for communicators,’ says Nathalie Renson, head of communications for Europe, Africa and the Middle East at flexible offices business Regus Group.

One major challenge is Africa’s size, which makes it so difficult to cover the whole continent from a single communications base on the mainland that many Western businesses choose not to have one at all.

At Indian technology company Infosys, Paul De Lara, corporate communications lead for Europe, says all African public relations activities are handled by its in-house team based in the UK, with PR agencies appointed to handle specific announcements in African territories as needed.

At Scotland’s Cairn Energy, group corporate affairs director Linda Bain says that the oil and gas group with exploration activities in Morocco, Mauritania and Senegal has found it hard to hire PR agencies in these countries that fit in with its culture and ethos.

Bain says: ‘The profession is underdeveloped in the region and the international agencies have a very limited network or in-country presence. A number of potential service providers were more expert in marketing and advertising rather than media and wider stakeholder engagement.’

Regus, meanwhile, operates in nearly 20 African countries, including recently-launched bases in Botswana and Namibia, but issues communications for the continent from Paris, with its global agency Bond Communications used in Africa for more targeted campaigns.

This has worked work well to date, says Renson, but the different parts of Africa are so distinctive from each other that Regus is considering hiring separate agencies for each region.

She says: ‘You wouldn’t consider serving the entire European continent with a one-language, single-culture office and Africa is even larger.’

Geopolitical, an international division of PR agency Bell Pottinger which has run presidential campaigns in Kenya, Zambia and Madagascar over the last 18 months, has tasked managing director Charles Vivian with producing an African strategy for the group. Vivian says locations for potential offices form part of the plan but the map is changing rapidly.

‘There are a few contenders for where we should have a base,’ he says. ‘A lot of African government and corporate advisory work is still based in Johannesburg and a lot of British PR agencies run their sub-Saharan Africa business from there but recently the South African economy has taken a downturn.

‘Lagos in Nigeria has become a hot spot but there’s also Nairobi where the United Nations has its African headquarters and Addis Ababa in Ethiopia where the Africa Union, an umbrella governmental organisation similar in some ways to the European Union, is based.’

Messaging across Africa is also difficult because the continent is home to so many distinct cultures.

Stephen Banks, lead for African communications at Swiss hotels group Movenpick, which has 15 hotels in Africa and a corporate communications office in Cairo, adds: ‘The perception is that it’s a difficult area to develop in due to its geographical size, the many countries that have their own laws and ways of working and the difficulties in finding specialists fully conversant with the way of working in the country.

‘With a continent as large as Africa and so diverse it’s not possible to have one global strategy, therefore these are tuned to each country’s needs and source market.’

Movenpick resolves this by targeting meetings and incentives business from Europe to Accra, leisure business from Europe to the Red Sea and corporate business from France to Gammarth in Tunisia.

Banks says Movenpick’s African PR activities are two-pronged, seeking to advertise globally its properties on the continent, while also working to attract local events and involve its hotels in local communities.

‘The international marketing communications strategy is more strategic in promoting our hotels to assist in development or to try to counteract negative messages due to a particular situation, for example the circumstances in Egypt post Arab Spring,’ he says.

Revolutions, indeed, are part of the risks of operating in Africa, as are the reputational risks of getting on the wrong side of the sustainability debate.

GSK did that a decade ago when it came under attack for allegedly trying to make excessive profits from major public healthcare initiatives in Africa.

Now, the drugs group has strictly-governed principles around what it is allowed to charge in Africa and is ploughing £130 million of investment into existing factories in Kenya and Nigeria, with plans to build up to five more plants in countries potentially including Ghana, Rwanda and Ethiopia.

Chief executive Sir Andrew Witty believes Africa is at an ‘economic tipping point’ and will be one of the world’s most important growth drivers within 20 years.

Unilever, whose chief executive Paul Polman is similarly evangelistic about emerging markets, business sustainability and the need to operate ethically, is currently battling with campaign group World Development Movement.

WDM claims that £600 million of UK aid money is being channelled through the G8-sponsored New Alliance For Food Security and Nutrition to help big businesses increase their profits in a ‘corporate scramble for Africa’.

While New Alliance claims its programme will lift 50 million people out of poverty by 2022, the WDM says the scheme will benefit Unilever and other multinationals at the expense of millions of small-scale farmers and is likely to increase, not reduce, African poverty and inequality.

At drinks giant Diageo, Africa might also seem to sometimes present more risks than potential rewards.

However, director of corporate communications James Crampton, who was until recently director of communication and sustainability at Diageo Africa, based in Johannesburg, says Africa is already a huge market for the group, generating £1.5 billion of annual sales from 40 countries and employing between 50 and 60 African corporate affairs staff. Most of the sales come from beer, with Nigeria consuming more Guinness each year than either the UK or Ireland.

Crampton says: ‘We’re finding that we benefit in Africa from what might be called a ‘colonial footprint’ that makes life a lot easier for western companies.’

Even small firms seem to be finding this. Gong Communications, a boutique public relations agency founded in 2004, still has only 19 staff in London but has been operating in Ghana and Kenya for the past two years and opened offices in Accra and Nairobi last year.

Narda Shirley, managing director at Gong, says: ‘It’s very common to find marketing communications agencies who also do PR in Africa. Public relations agencies tend to be very events-focused.

‘While you can find public affairs and government relations specialists, we haven’t yet come across specialist business-to-business, technology or financial public relations agencies and there are even fewer people around who can do internal communications.

‘Public relations in sub-Saharan Africa really means media relations. People still use press conferences regularly as a way of communicating with media. But media relations isn’t hugely valued as a discipline.

‘The standards of journalism vary widely. It’s not uncommon for a press release to be printed in its entirety or for there to be spelling mistakes and inaccuracies in the copy.’

Marcus Sorour, vice-president and general manager for South Africa at public relations agency Waggener Edstrom, based in Johannesburg, says there’s a huge need for the empowerment of local African staff and heartfelt corporate and social responsibility policies.

‘Make a difference,’ he says. ‘Don’t only do good business, but also do good, whether that’s giving back to the community in the form of charity or non-governmental organisation support, or through contributing to skills development by partnering with an established institution.’

As past mistakes have demonstrated, however, investing in African communications is a long-term game. ‘Financial communications in Africa is at best a nascent industry,’ says Bobby Morse, partner at Buchanan Africa, a joint venture between Buchanan and Scan Group, a Nairobi-listed business part-owned by Buchanan’s parent WPP Group.

‘The continent has the challenge of having abundant agricultural, mineral, hydrocarbon and human capital resources yet only a very limited capital market infrastructure.

‘There are few developed markets in Africa from a financial perspective, those being the axis of Nigeria, South Africa and Kenya, whilst the other markets remain largely undeveloped.’

That may remain the case for some time but, unless the continent suffers another collapse, the opportunity for western PR firms to marry the investment opportunity of fast growth and sustainable businesses with access to a variety of financing options in Africa is likely to prove irresistible.

A sustainable, long-term African boom may eventually happen but there are likely to be some shocks along the way. Africa is very definitely not for the faint-hearted.